Coles to buy milk direct from farming co-ops

Coles is following Woolworths in locking in supply contracts for its home brand milk directly with dairy cooperatives.

AAP: Dave Hunt

Coles has announced two dairy cooperatives will supply its milk in Victoria, New South Wales and Queensland.

The supermarket giant's deals are with Devondale - Murray Goulburn (which is controlled by 2,480 shareholders in Victoria, South Australia and New South Wales) and Norco, which have signed on for 10 and five years respectively.

The Devondale - Murray Goulburn co-op will invest $120 million dollars in new processing plants in Sydney and Melbourne, and will supply milk for the Coles house brand as well as its own label.